Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Asbury Automotive Group (ABG). ABG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 8.41, which compares to its industry's average of 8.51. Over the last 12 months, ABG's Forward P/E has been as high as 11.25 and as low as 6.61, with a median of 8.39.
We should also highlight that ABG has a P/B ratio of 1.23. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.18. Within the past 52 weeks, ABG's P/B has been as high as 1.71 and as low as 1.18, with a median of 1.40.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ABG has a P/S ratio of 0.25. This compares to its industry's average P/S of 0.26.
Finally, our model also underscores that ABG has a P/CF ratio of 7.79. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. ABG's P/CF compares to its industry's average P/CF of 9.88. Over the past year, ABG's P/CF has been as high as 11.08 and as low as 6.27, with a median of 9.09.
These are just a handful of the figures considered in Asbury Automotive Group's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ABG is an impressive value stock right now.
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Asbury Automotive Group, Inc. (ABG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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